Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Rio Tinto is considering suspending production at its Straumsvík smelter in Iceland for two years, Morgunblaðið, an Iceland newspaper, reported on April 7.

The aluminium smelter in south Iceland has been suffering losses for the last eight years and reported a ISK13bn ($91mn) loss in 2019. 

The smelter produces 184,000mt of aluminium per year. 

According to the report, Rio Tinto – a global metal and mining giant – is considering several options to reduce losses in the time of the economic slowdown due to the COVID-19 outbreak.

The report states that the company is considering filing a legal case against Iceland’s National Power company as the high cost of electricity is one of the key factors contributing to the losses. 

The aluminium smelter has alleged that the power company is selling electricity generated through coal and power, and not by using hydropower, the local newspaper reported, adding that the legal case will seek to exempt Straumsvik from purchasing power from the National Power Company. 


In a press release issued in February, the company had stated that it is considering options like curtailment or closure of the smelter, and the same would be completed in the first half of 2020.


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